UK Indexes Soar 2.4%; Retail Sales Decline

Arthi Gupta
15 Sep, 2011
New York City

The UK indexes soared after France and Germany reaffirmed Greece

[R]3:05 PM London – The UK indexes soared after France and Germany reaffirmed Greece’s place in the euro area. The UK retail sales declined but inflation expectations for the year ahead increased to 4.2% in August.[/R]

UK stocks surged after the leaders of France and Germany extended support to Greece. UK retail sales declined 0.2% in August.

The UK government has decided to take legal action against the European Central Bank that could prevent clearing houses in the UK from dealing with euro-denominated financial products, according to reports.

The ECB's plans would require clearing houses that handle more than 5% of the market in euro-denominated financial products to be based in the euro-zone.

French Prime Minister Nicolas Sarkozy and German Chancellor Angela Merkel said in a joint statement that the future of Greece is in the euro-zone.

In London, FTSE 100 Index gained 127.69 or 2.40% to 5,355.65 and the pound edged higher to $1.5801.

UBS reported $2 billion in unauthorized trading losses and London police arrested a 31-year-old UBS trader, Kweku Adoboli, in the alleged fraud.

UBS declined to confirm his name.

UK Retail Sales Drop

Retail sales in the UK, including automotive fuel, fell 0.2% in August, reversing a 0.2% increase in July, according to data from the Office for National Statistics released today.

Separately, UK' inflation expectations for the year ahead increased to 4.2% in August from 3.9% in May, a survey by the Bank of England and GfK NOP showed on Thursday.

Gainers & Losers

Brightside Group plc fell 0.95% to 26 pence after the insurance broking and financial services business reported first-half revenue surged 49.4% to £39.76 million from £26.61 million a year earlier. Profit for the period soared 84% to £5.03 million or 1.09 pence per share versus £2.74 million or 0.65 pence per share a year ago.

Gable Holdings Inc. soared 12.03% to 18.63 pence after the investment holding company reported first-half profit before tax soared 52% to £2 million from £1.3 million in the prior year. Gross written premium rose 42% to £12.2 million from £8.6 million a year earlier.

Kesa Electricals plc surged 6.25% to 92.60 pence after the consumer electronics retailer said first quarter total group revenue fell 9.9% on a like-for-like basis, reflecting weakening market conditions and strong World Cup comparatives of the last year.

Kier Group Plc soared 5.87% to 1,190 pence after the construction and civil engineering services provider reported fiscal year 2011 revenue improved 4% to £2.18 billion from £2.10 billion in the prior year. Profit for the period soared 56% to £61.8 million or 163.9 pence per share from £39.7 million or 107.3 pence per share in the previous year.

Kingfisher Plc gained 4.72% to 250.90 pence after the home improvement retailer said first-half sales increased 3.8% to £5.66 billion from £5.45 billion in the prior year. On a like-for-like basis, sales climbed 1.6% in the period compared to a drop of 1.3% last year.

Profit during the period climbed 28.4% to £321 million or 13.5 pence per share from last year's £250 million or 10.5 pence per share in the prior year.